How Successful Planning Changed Downtown L.A.

September 19, 2012

On an early Thursday evening in the summer of 1995, the corner of Spring Street and Sixth Street in the heart of downtown L.A. is deserted, except for clusters of drug dealers offering passersby the opportunity to buy crack cocaine. Fifteen years later, thousands of Angelenos have congregated at the same corner for a monthly Art Walk, stopping to eat at nearby food trucks serving gourmet fare, sometimes stopping to start a conversation at one of two coffeehouses near the corner. What triggered this remarkable transformation? While many factors have contributed, most agree that a provision inserted in the city’s zoning code—the Adaptive Reuse Ordinance (ARO)—played the most important role.

Historic Downtown

For a city reputed to have no history, L.A. has retained one of the nation’s most intact historic downtowns. From the late 1960s through the 1980s, the city did not demolish and replace the heart of its downtown. Instead, it essentially abandoned and forgot about it, creating instead an entirely new downtown on Bunker Hill, replete with glassy skyscrapers. By the 1980s, people had difficulty remembering that downtown’s Spring Street had been famed as the “Wall Street of the West,” with stately Beaux Arts bank buildings, financial buildings, and the former Pacific Stock Exchange.

A proposal in 1978 to demolish the L.A. Central Library served as the catalyst to encourage preservationists to create a broad-based, citywide preservation advocacy and education nonprofit, the Los Angeles Conservancy. In 1981, the conservancy’s advocacy moved the city beyond saving individual buildings with the passage of the Historic Preservation Overlay Zone (HPOZ) Ordinance, enabling the creation of historic districts.

By the late 1990s, with successes multiplying across the city, historic preservation was increasingly accepted as an economic revitalization tool, yet the many successes did not easily translate into a widespread revitalization of the historic downtown. The success of the Adaptive Reuse Ordinance followed several abortive efforts to promote housing in downtown L.A.

Adaptive Reuse Ordinance

In 1996, the Los Angeles Community Redevelopment Agency (CRA) and the Central City Association (CCA), the major advocacy organization for downtown businesses, convened an Adaptive Reuse, Live/Work Workshop, which grew into the Adaptive Reuse Task Force. The task force’s work culminated in the 1999 passage of the ARO. City planning department staff planner Alan Bell took the lead in its drafting the original ordinance and subsequent amendments and interpretations. Gilmore’s project, which he named the “Old Bank District,” was the first to test the viability of the ordinance and the state of the downtown residential market.

The ordinance largely waived or grandfathered in zoning requirements for conversions of downtown buildings in a commercial or R5 (high-density) residential zone constructed before July 1, 1974. In short, most adaptive reuse projects were now able to bypass the lengthy planning and zoning approval process altogether and proceed directly to the Department of Building and Safety for permits. The Department of Building and Safety developed special guidelines for adaptive reuse projects, which it tested on Gilmore’s Old Bank District project and other early applications. The guidelines were published for all projects in 2002 and ultimately codified (as amendments to Division 85 of the city’s building code) in 2005. These provisions addressed occupancy requirements, fire/life safety, disabled access, and structural/seismic safety. In late 2002, the city council also extended the adaptive reuse incentive to five other areas of the city and then extended it citywide in 2003.

The Bottom Line

Even with the very best marketing and coordination, adaptive reuse projects would be successful only if they “penciled out” economically. Many early rehabilitations relied on two historic preservation financial incentives. The Federal Historic Rehabilitation Tax Credit offers a 20 percent credit applied to qualified expenditures on historic rehabilitation for buildings listed in the National Register of Historic Places. Because Spring Street and Broadway were National Register historic districts, all of the historic buildings on both streets qualified for this incentive.

Other downtown building owners sought local Historic-Cultural Monument designation of their buildings to qualify for the Mills Act incentive. The Mills Act, a state law passed in 1977 and applied in L.A. starting in 1996, can provide property tax relief to owners of historic properties. Owners contract with city government, agreeing to preserve the building in accordance with historic preservation standards and to pursue an agreed-upon maintenance schedule in return for an alterna- Continued on page 23 tive property-tax assessment formula that typically results in a 20 to 80 percent reduction in property taxes.

Success and Criticism

The ARO was not entirely free of controversy. Critics have been concerned that the ordinance has resulted in the gentrification of downtown, displacing nearby lower-income residents and not offering new affordable housing. Despite these reservations, L.A.’s ARO and accompanying implementation program must be recognized as one of the most successful urban strategies pursued in recent decades. The program has preserved a remarkable collection of historic structures that would have otherwise been threatened with demolition or long-term obsolescence; created thousands of units of new housing in the city’s neighborhoods best served by transit and existing infrastructure; and established entirely new residential communities downtown and in other neighborhoods, such as Hollywood, spurring new retail investment and nightlife.

Adapted with permission from the new book Planning Los Angeles, the above article is a greatly condensed version of the chapter “A Planning Ordinance Injects New Life into Historic Downtown,” by Ken Bernstein. The book is available to AAG members at the American Planning Association member price. See page 22 of the AAG Newsletter (July/August 2012) for details.